McGuinty has a choice to make: support a jobs strategy or a job killing strategy
TORONTO, March 6, 2012 /CNW/ - Ontario official rate of unemployment is 8.1% -- well above the national average. "But instead of developing a jobs strategy, the Dalton McGuinty government may be preparing a job killing strategy if the Liberals accept the Drummond Commission cost-cutting advice, more than 120,000 jobs will be cut from the broader public sector," says Michael Hurley president of the Ontario Council of Hospital Unions (OCHU).
Two Nobel prize-winning economists - Paul Krugman and Joseph Stiglitz argue that when economic recovery is shaky government program cuts are dangerous.
"Krugman and Stiglitz have a completely different perspective on cost-cutting, austerity and the role of government in economic recovery than Don Drummond," says Hurley. "Given their earned reputations for forecasting and analysis, these warning should concern our provincial government."
Ontario spends less on programs (on average) than other Canadian provinces. Should McGuinty implement Drummond's austerity plan, by 2017/18, Ontario's program spending per person would be 16.2 per cent lower in real dollars than it was in 2010/11.
Stiglitz one of the most cited and respected economists in the world said at a Toronto Forum for Global Cities last fall that government austerity measures and cuts to program spending as Drummond is proposing are an economic 'suicide pact' that will dampen growth.
"Following Drummond's advice to cut government programs means tens of thousands of Ontarian's will lose their jobs. 10,000 in education, 30,000 in health care and up to 120,000 across the broader public sector. These job losses will doom Ontario's tenuous economic recovery. The Premier needs to give Ontario a fighting chance at economic recovery and make creating and sustaining employment the top priority rather than an exclusive focus on the deficit," Hurley says.
Other respected Ontario economists are challenging Drummond's austerity plan for Ontario. They argue that recent experience in Europe has shown that the more governments cut public spending, the more Gross Domestic Product (GDP) shrunk and the worse their debt ratio became.
Drummond's plan, say economists Hugh Mackenzie and Jim Stanford would result in a $10-18 billion loss to Ontario's GDP over four years and drag Ontario into negative GDP territory. Part of their economic advice is that the province should avoid spending cuts and expand public services to create jobs.
"Do the Liberals believe that the province is over-spending on public services like health care, but that billions in tax cuts to business and the wealthy are fine? Ontario has a revenue problem, not a spending problem. We spend $250 less per citizen than any other province does on public hospitals, for example," Hurley says.
Ontario delivers the most effective hospital service in Canada, measured by cost, beds, staff and lengths of stay. "Yet Drummond's report suggests that 12,000 of Ontario's hospital beds can be eliminated along with the staff who support them. For many communities this will be the end of their community hospital and a wind-up for what is now their town's largest employer. Care will be irreversibly damaged. So will the local and provincial economies," says Hurley.
For further information:
President, Ontario Council of Hospital Unions (OCHU/CUPE)